scope were explained on behalf of that com. might have been taken without an undue mittee in each house, and those explanations diminution of the seal herds.” And it apdeclared the object to be as above indicated. pears that the United States originally pre

Although the authority conferred as to the sented as part of its case a claim for the retimes of killing and the number to be killed covery of the damages which it and its lessee was continuing and discretionary, and al- had sustained by reason of the limitation to though the company in the present lease cove-7,500, but this claim was certainly not prenanted that it would not kill in any year a sented as a claim which the company could greater number than was authorized by the maintain against the United States under the Secretary, yet we think it would be going lease, and it involved no question of the power much too far to hold that the original provi- of the Secretary in respect of the lessee under sion for a maximum number, and a propor- the covenants of that instrument. There tionate reduction nf the fixed rental in case was no element of estoppel about the transof a limitation, was done away with by im action, and counsel had no authority to bind plication.

the government for any other purpose than Repeals where the intention to do so is not the pending cause. expressed are not favored, and moreover, here Moreover, counsel for the United States the mischiefs sought to be remedied are quite were constrained to expressly admit that the obvious. One was that it was evidently evidence failed to establish that an additional thought that seals might properly be taken take over and above the 7,500 could have during the first half of August, and the ex- been safely allowed. In the argument on be. isting statute forbade this; the other was, half of the United States, Judge Blodgett, one that the maximum was fixed for each island, of the counsel, and all the counsel concurred, whereas it had probably been ascertained that made this statement: "Frankness requires the distribution was erroneous, or that the us, as we think, to say that the proofs which numbers that might be safely taken on one appear in the counter case of the United or the other might vary, and consequently states as to the condition of the seal herd on that greater elasticity was desirable. The the Pribiloff islands show that the United language by which these objects were at- *States could not have allowed its lessees to[132 tained was entirely reconcilable with the have much, if any, exceeded the number of prior law so far as it did not purport to skins allowed by the modus vivendi of 1892 change it.

without an undue diminution of the seal The legislation from the beginning was di- herd, and upon this branch of the case we rected to the preservation of the fur seals, simply call the attention of the tribunal to and the act of 1870 recognized that it might the proofs, and submit the question to its debe necessary to such preservation that the cision." And later, counsel announced that number to be killed in the different years the United States would not ask the tribunal should be varied, and the discretion to do this for any finding for damages upon and under was vested in the Secretary, but while this article 5. authority was made more comprehensive Our opinion is, that, assuming ihat the lesby the act of 1874, and a redistribution as be see took all the risk of a catch, reduced by tween the two islands authorized, we cannot natural causes, yet that when the number accept the view that it was the intention by that might be killed was limited by the act that act to wholly change the scheme of leas- of the government or its agent, the Secretary, ing by making the discretion of the Secretary the company was entitled to such reduction purely arbitrary, and dispensing with any on the rental reserved as might be proper, maximum or reduction.

and that the rule to be observed in that re181) *It should be added that the action of the gard would be a reduction in the same pro

Treasury Department in the matter of the portion as the number of skins permitted to abatement of rent for 1890, 1891, and 1892 be taken bore to the maximum. This would does not impress us as amounting to such de reduce the annual rental for the year under partmental construction as entitles it to any consideration from $60,000 to $4,500; the tax particular weight, and the views of the De- due would be $15,000, and the per capita $57,partment of Justice were conflicting. 187.50, making a total of $76,687.50.

Reference is made to article 5 of the treaty 2. Laying out of view the concession unof 1892 extending the modus vivendi and the der the first proposition, the company fur. action taken under it before the tribunal of ther contended that the prohibition by the arbitration, as if amounting to an estoppel, United States, by agreement with Great or an admission against interest, or at the Britain, of seal killing in excess of 7,500, to be least as having some considerable bearing on taken on the islands for the subsistence of the the construction of the lease and the statutes. natives, relieved the company from its covThat article provided, among other things, enants for the payment of rent and royalty, that "if the result of the arbitration shall be and that no action could be maintained thereto deny the right of British sealers to take for on the lease. seals within the said waters, then compensa- The evidence disclosed that prior to 1890 tion shall be made by Great Britain to the the number of seals annually resorting to United States (for itself, its citizens and les- these islands was rapidly diminishing. This sees) for this agreement to limit the island was attributed to the open sea or pelagic seal. catch to 7,500 a season, upon the basis of the ing, whereby the seals, especially the females, difference between this number and such lar. who were exempt from slaughter under the ger catch as in the opinion of the arbitrators I laws of the United States, were interrupted in

their passage to the islands by the crews of hibited and prevented the said company from foreign vessels and were killed in great num- taking any seals whatever from the said bers while in the water. For several years islands during the year 1893, and thus dethe United States, asserting that it had terri. prived the said defendant of the benefit of its torial jurisdiction over Behring sea, had been said lease.” We think this so far partakes of striving to prevent vessels of foreign nations a conclusion of law that we are not shut up to from seal hunting on the open waters thereof. treating it as a finding of fact. The power to Great Britain denied the territorial jurisdic- regulate the seal fisheries in the interest of

tion of the United States and denied that the the preservation of the species was a sovereign [133]United States *had a right of property in the protective power, subject to which the lease

fur seals while on the high seas during their was taken, and if the government found it
progress to or from the islands of St. Paul necessary to exercise that power to the ex.
and St. George, and it became necessary to re- tent which this finding asserts, and if we as.
sort to international regulation to prevent the sume that the company might thereupon have
extermination of the seals. Indeed, it ap-treated this contract as rescinded, it is suffi.
pears that the Treasury agent in charge made cient to say that it took no such position, but
a report to the Secretary of the Treasury af- accepted the performance involved in the de-
ter the season of 1890, in which he strenuous-livery of the 7,500 skins. The company did
ly urged the necessity of stopping sealing for not wish to rescind or abandon, and it could
a number of years absolutely upon the islands not but recognize that, as the modus was en-
as a necessary measure for the preservation tered into in an effort to save the seal race
of the seals. On the 15th of June, 1891, an from extermination, and thereby to pre-
agreement for a modus vivendi was concluded serve something for the future years of the
between the government of the United States lease, the prohibition was so far for its bene-
and the government of Her Britannic Majesty fit
"in relation to the fur seal fisheries in Behring Again, although the government acted in
sea” (27 Stat. at L. 980), whereby with a view making the lease by the hand of the Secre-
to promote the friendly settlement of the tary, it was the real contracting party, ex.
questions between the two governments ercising the power of regulation through the
touching their respective rights in Behring Secretary, so that it was immaterial whether
sea, "and for the preservation of the seal the Secretary on his own judgment or in com-
species," it was agreed that seal killing should pliance with the will of the government con-
be prohibited until the following May, al fined the number of scals taken in the year
together by Great Britain, and by the United 1893 to 7,500.: Undoubtedly the government
States "in excess of seventy-five hundred, to could have directed the Secretary by law to
be taken on the islands for the subsistence restrict the killing to 7,500 seals, and the
and care of the natives." This was followed treaty was nothing more.
by a convention submitting to arbitration the The company could not object that the
questions concerning the jurisdictional rights Secretary was constrained to impose the lim.
of the United States in Behring sea; "the itation, for the Secretary was bound to obey
preservation of the fur 'seal in, or habitually the instructions of his principal, and the com-
resorting to, the said sea," and the right to pany *could not make it the subject of a con-[135]
take such seals, which was proclaimed May test in pais as to whether the preservation
9, 1892 (27 Stat. at L. 947).

of the herd in fact required the limitation.
And under the same date the modus virendi The whole business of taking seals was con-
was renewed during the pendency of the ar- ducted under the supervision of the govern.
bitration. 27 Stat. at L. 952.

ment, and by $ 1973 the Secretary was auThe arbitral tribunal sat in Paris in 1892–thorized to appoint-agents, who were charged 93, and the prohibition covered the killing with the management of the seal fisheries. period for which recovery is sought in this The record shows that instructions were

issued to the government supervising agent The learned circuit judge held that the on. April 26, 1893, and a copy delivered to the limitation under the modus vivendi was not superintendent of the company before the a designation by the Secretary, but was a commencement of the season of that year. prohibition by the government; and, conse. These instructions directed the number quently, that if the lessees had not received of seals to be taken during the season of 1893 any skins the action could not have been to be limited to 7,500. It was stated by the maintained. But he held that as the 7,500 Secretary that it was believed “that if the skins were received by the lessees they must killing be confined between the first of June

make compensation for them; that a proper and the tenth of August, a better quality of (134]way to determine *this was to ascertain what skins would be obtained and less injury

the fair product of the year, which might would be done to the rookeries;" and he
safely be taken, was, and compute what each added: “This matter is, however, left, as
skin would have cost the company, assuming above stated, to your discretion, and in refer-
they had taken that number; and by this cnce thereto you will confer fully with the
mode of computation, having found that representative of the company, its interests
20,000 might properly have been taken, he and those of the government in the preser.
reached the sum of $94,687.50 as the amount vation of the fur seals being identical.”
due to the government.

In the letter of the attorney of the com-
The circuit court found that the United pany of November 15, 1893, he said: “During
States, pursuant to the modus vivendi. "pro-l the present year this company, in strict com-

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erred in its disposition of the counterclaim.[137]

pliance with the orders of the Treasury Department, restricted its catch to 7,500." In *The seal fisheries of the Pribiloff islands other words, it appears that both parties re- were a branch of commerce and their garded the Secretary of the Treasury as au-|regulation involved the exercise of power as thorizing the taking of 7,500 skins in the a sovereign and not as a mere proprietor. year 1893. Such governmental powers cannot be contractUnder the law of 1870 and the various sec-ed away, and it is absurd to argue that in this tions of the Revised Statutes the power was instance there was any attempt to do so, or expressly reserved to the government to make any sheer oppression or wrong inflicted on the whatever restrictions of the business it might lessee by the government in the effort to prosee fit to make; the lease recognized this to tect the fur seal from extinction. the full extent; and it was, moreover, expressly stipulated that the company was not to kill or permit to be killed a greater number than the Secretary might authorize. The company was offered 7,500 skins for 1893: took them; paid the amount fixed by the Secretary under the lease for compensation to the natives for taking and loading the skins, and subsequently tendered the sum of $23,789.50 as, according to its computation, the full amount due under the lease. These [136]particular seals were killed by the government agent, but notice of the killing, from time to time, was given to the company, and the company requested to select the skins it desired, which it did. The government did not regard the lease as broken, but proceeded under it, and delivered the 7,500 skins as full The judgment of the Circuit Court is reperformance of the covenant on its part, for versed, and the cause remanded with a directhe privilege of taking the seals was subjecttion to enter judgment in favor of the Unitto such limitation on the number as the gov-ed States for $76.687.50, with interest from ernment believed it necessary to impose; and the first day of April, 1894; and to enter the company acquiesced in that view by tak-judgment in favor of the United States on the ing the 7,500 skins without dissent. counterclaim.

The privilege leased was the exclusive right to take fur seal, but it was subject, and expressly subjected, from the beginning, to whatever regulations of the business the Unitjed States might make. If those regulations reduced the catch, the company was protected by a reduction of the rental, and paid taxes and per capita only on the number taken. The other expenses to which it bound itself were part of the risk of the venture. The catch for 1893 was lawfully limited to 7,500 and the company accepted and disposed of the skins. It cannot now be heard to insist that that limitation was in breach of the obligations of the government, for which, though still claiming the contract to be outstanding, it is entitled to recover damages.

It was after this that the question arose, not of breach of contract, but as to what


sum, if any, was due from the company under PULLMAN'S
the lease more than it had tendered.
the company entitled to a reduction on what
it had agreed to pay, and, if so, how



3. Finally, the company claims that the United States are liable to it in damages to the extent of $287,725 for skins it could have taken during the season of 1893, without un-The reasonable injury to or diminution of the seal herd, and which the United States prevented it from doing; and that it can avail itself of this claim in this suit by way of recoupment and counterclaim.


The circuit court rejected this counterclaim on the ground that the claim had not been presented and disallowed by the accounting officers of the Treasury, and dismissed it, not on the merits, but without prejudice. The company prosecuted its writ of error from the circuit court of appeals for the second circuit, and assigned as errors, among others, that the circuit court erred in adjudging that its claim for damages was not duly presented; that the court did not allow its counterclaim; and that judgment was not directed in favor of the company. From what we have already said it will have been seen that we are of opinion that the company cannot maintain this claim for damages, and that, assuming that the claim had been duly presented and disallowed, and that, if meriorious, it might be availed of by way of recoupment in this action, the circuit court

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(See S. C. Reporter's ed. 138-161.)

right to appeal-when a complainant in equity may dismiss his suit-prejudice to defendant-review of motion to discontinue when leave to discontinue may be denied cross bill for affirmative reliefproperty transferred under illegal contract-right to recover-measure of value -value of contracts and patents transferred earnings of the property—loss by breaking up of business.

The right to appeal directly to this court

from the circuit court because of a constituNOTE. As to what acts and contracts of a corporation are ultra vires; contracts in violation of statute or public policy; executed contracts; instances; estoppel or ratification of transactions ultra vires, see note to Central Transp. Co. v. Pullman's Palace Car Co. 35:55. As to what laws are void as impairing obli gation of contracts, see note to State, Ranger, v. New Orleans, 26: 132.

As to what remedy at law will prevent rem

edy in equity, see note to Tyler v. Savage,


As to account stated; bar to bill in equity, defenses must be made in original action,--see note to Chappede laine v. Dechenaux, 2: 629.

tional question is not waived by taking an

[Nos. 141, 496.) appeal also to the circuit court of appeals. 2 A complainant in an equity suit may gener. Argued March 24, 25, 1898. Decided May 31, ally dismiss his bill at any time before the hearing; but leave to dismiss a bill is not

1898. granted where, beyoud the annoyance of a second litigation upon the subject-matter, such action would be manifestly prejudicial

APPEAL from a judgment of the Circuit to the defendant.

Court of the United States for the Eastern 3. Legal prejudice to defendant to authorize a District of Pennsylvania and also on certiodenial of a motion by plaintiff to discontinue rari to the United States Circuit Court of Apmust be other than the mere prospect of peals for the Third Circuit to review a judg. future litigation.

ment of the Circuit Court in favor of the 4. The decision of a motion for leave to dis- Central Transportation Company against the continue will not be reviewed in this court ex. Pullman's Palace Car Company, for the sum cept for abuse of the discretion of the court, of $4,235,044, for the value of certain property or an obvious violation of a fundamental rule which was leased by the Central Transporta. of a court of equity.

tion Company to the Palace Car Company by 6. Leave to discontinue a suit in equity to re- an ultra vires lease, and which was to be restrain bringing suits for rent, alleging an elec- turned or paid for by the latter company; tion to terminate the lease by virtue of its provisions and that the lease was ultra vires,

Reversed, and case remitted to the United and offering to do what is equitable and right States Circuit Count for the Eastern District for the property demised, and asking the

of Pennsyivania with directions to enter a court to decree the compensation or relief to judgment for the Central Transportation be made, is properly denied after the lease Company in accordance with the opinion. has been held void in another case, and after

See same case, 139 U. S. 24 [35: 55), also an injunction has been granted against recov.

same case below, 39 U. S. App. 307, 76 Fed. ering rent and testimony has been taken on the issues involved in the suit, when defend. Rep. 401, 22 C. Ć. A. 246. ant opposes such discontinuance and asks leave to file a cross bill to avail itself of the Statement by Mr. Justice Peckham: tenders made in the original bill.

The record in this case shows that in 1870 6. A cross bill for affirmative rellef 18 properly the Central Transportation Company, hereallowed to be filed by defendant for the re- after called the Central Company, was a corturn of property delivered under an illegal poration which had been in 1862 incorporated lease and to determine the liability of the under the general manufacturing laws of the complaicant, where he has alleged an election to terminate the lease, and also alleged its in- state of Pennsylvania. It was engaged in validity and offered to do what the court the business of operating railway sleeping should decree to be just.

cars and of hiring them to railroad companies 7. The right to a recovery of property trans- under written contracts by which the cars

ferred under an illegal contract is founded were to be used by the railroad companies upon the implied promise to return or make for the purpose of furnishing sleeping con. compensation for it.

veniences to travelers. The corporation at 8. The right to recover property delivered on this time had contracts with a number of dif. der an illegal contract rests upon a disaffirm- ferent railroad companies in the east, princiance of the contract, and is permitted only to pally, but not exclusively, with what is do justice to the party who has thus deliv. known as the Pennsylvania Railroad system, ered it.

and it had been engaged in its business with 9. The market value of the stock of a corpora: those companies for some time prior to 1870. tion is uot a proper measure of the value of its property transferred by an ultra vires In the year last named the Pullman's Palace lease, and which must be returned or paid Car Company, hereafter called the Pullman for.

Company, was a corporation which had been 10. The value of contracts with third parties, incorporated under the laws of the state of

or of patents owned by a company when it Illinois. It was doing the same general kind transfers its property under an ultra vires of business in the west that the Central Comlease, and which bave expired when the oblipany was doing in the east. For reasons not gation to restore the property or make com material to detail, the two companies entered pensation therefor is enforced, cannot be con into an agreement of lease, which was exesidered in determining the value of such prop cuted February 17, 1870. erty, when payment for the use of such pat. ents and contracts for the time they were

By its terms the Central Company leased used was included in the rept paid, and they to the Pullman Company its entire plant and bad become valueless at the time of their personal property, together with its contracts expiration.

which it had with railroad companies for the 11. The earnings of property transferred under use of its sleeping cars on their roads, and

an ultra vires lease cannot be included in the also the patents belonging to it. The lease compensation to be paid the lessor in lieu of was to run for ninety-nine years, which was the property on disafirmance of the contract. the duration of the charter of the Central 12. The loss sustained by the lessor in an ultra Company. vires lease on account of the breaking up of

It was also agreed that the Central Comits business and the loss of contracts witb third persons when the lense is repudiated pany would not engage in the business of cannot be recovered as part of its relief, ou manufacturing, using, or hiring sleeping carg recovering compensation for the property while the contract remained in force. transferred and not restored.

In consideration of these various obliga

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tions, the Pullman Company agreed to pay property, contracts, and rights of the said de annually the sum of $264,000 during the enfendant, the Central Transportation Com. tire term of ninety-nine years, in quarterly pany, and including a covenant on the part payments, the first quarter's payment to be of said defendant corporation not to transact made on the 1st of April, 1870.

during the existence of said lease any of the (140] "From the time of the execution of the con business for the transaction of which it was

tract its terms were carried out, and no par- incorporated, was never legally valid beticular trouble occurred between the compa- tween the parties thereto, but was void for nies for about fifteen years. During this time the want of authority and corporate power and up to the 27th day of January, 1885, the on the part of the defendant to make the Pullman Company paid to the Central Com- said contract of lease, and because the same pany, as rent under the contract, the sum of was in violation of the charter conferring the $3,960,000, without any computation of in corporate powers of said defendant, and of terest. About or just prior to January, 1885, the purpose of its incorporation, as by the said differences arose between the companies. charter, to which, for greater certainty, refThe Pullman Company claimed the right to erence is made, your orator is advised it will terminate the contract under the eighth appear; that the said contract of lease was clause thereof, or else to pay a much smaller never susceptible of being enforced in law by rent. The merits of the controversy are not your orator against said defendant, and can. material,

not therefore be construed and held to conThe two companies not agreeing, and the tinue in force and obligatory upon your oraPullman Company refusing to pay the renttor; and that your orator can be under no stipulated for in the lease, the Central Com other legal obligation or equitable duty to pany brought successive actions to recover the defendant than to return such of the the instalments of rent accruing. In one of property assumed to be demised as is capathem the Pullman Company pleaded the ille ble of being returned, and to make just comgality of the lease, as being ultra vires, the persation for such other of the said property charter of une Central Company. The plea as under the said contract of lease it ought prevailed in the trial court, and upon writ of to make compensation for, which it is will. error the judgment upholding this defense ing and now offers to do.” was, in March, 1891, sustained in this court.

In the prayer for reliet it was also askelCentral Transportation Company v. Pull- “That the court may consider and decreo man's Palace Car Company, 139 U. S. 24 (35: whether said contract of lease was not made 55].

without authority of law on the part of the After the bringing of several actions for in. defendant and in excess of its corporate stalments of rents by the Central Company powers and in violation of its corporate du. and before the question of ultra vires had ties, so as not to be enforceable against your been argued in this court, the Pullman Com- orator beyond the obligation of your orator pany on the 25th day of January, 1887, com to make return of or just compensation for menced this suit by the filing of its bill the property demised; and that an account(i 12) against the Central Company in the circuit may be taken between your crator and decourt of the United States for the eastern fendant, and that the amount may be ascerdistrict of Pennsylvania. The bill asked for tained that should be paid by your orator to an injunction to restrain the bringing of the defendant on any account whatever; more suits for rent. It gave a general history . . and that an accounting may be had beof the transactions between the companies tween youi orator and defendant as to all the from the execution of the contract between matters and things set out in this bill.” them in February, 1870, down to the time of The Central Company answered the bill, the filing of the bill, and it alleged the elec-denying many of the material allegations tion of the Pullman Company to terminate therein contained. It denied that the Pullthe lease under the provisions of the eighth man Company had ever elected to terminate clause thereof, and the willingness of the the lease under the provisions of the eighth company to pay what should be found by the clause thereof, and it alleged that the lease court to be equitable and right to the Cen was still in existence, and that it had the tral Company on account of the property right to recover from the Pullman Company which had been transferred by that company the amount of the rent named in the lease, to it, and to this end it prayed the aid of the and that no valid agreement had ever been court. The bill also contained the following made between the companies in any way alallegation:

tering the lease or reducing the amount of [141] *“And your orator shows that in said lease the rent payable thereunder. It denied that

it is recited that the said contract of lease is the lease was illegal, and it alleged that even
made on the part of the defendant, the said if it were, the illegality did not justify the
Central Transportation Company, under an complainant in applying for any equitable
act of the general assembly of the common relief whatever. Upon application on the
wealth of Pennsylvania therein named, ap- part of the Pullman Company the court
proved the 9th day of February, A. D. 1870, granted an injunction restraining the bring.
à copy whereof is hereto attached, marked ing of suits for the collection of rent ac-
Exhibit G, and referred to as part of this bill; cruing after July, 1886, but it declined to en-
but your orator is advised, and therefore sub- join those already pending for rent accruing
mits it to the court, that the said lease being before that date.
a grant, assignment, and transfer of all the After considerable proof had been taken

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